This presentation by Alexandre DE STREEL, Professor of EU Law at UNamur, was made during the discussion “Personalised Pricing in the Digital Era” held at the Joint meeting between the Competition Committee and the Committee on Consumer Policy on 28 November 2018. More papers and presentations on the topic can be found out at oe.cd/ppd.

1. Regulation of personalised pricing
in the digital era
Alexandre de Streel, University of Namur, NADI and CERRE
Marc Bourreau, Telecom ParisTech and CERRE
OECD Competition Committee and Committee on Consumer Policy
Paris, 28 November 2018
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2. 1. Main legal instruments regulating personalised pricing
Types of
legal
instrument
Consumer
protection
Personal data
protection
Competition
protection
Discrimination
Protection
Main
Objectives
Transparency and
fairness in possibly
unbalanced
transactions
Data subject
privacy and self-
determination
Economic total or
consumer welfare
and beyond
Protection of some
fundamental rights
Scope Mainly B2C
transactions
Transactions
relying on personal
data
Transactions made
by undertakings
All transactions by
the State and/or
private firms
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3. Main remedies: Empowerment and beyond
• Transparency/Explainability, at different levels
• Personalization itself
• Models used for the personalization: criteria, weighting
• Specific explanation of the prices proposed: criteria, weighting
• Other prices offered: anchoring
• User choice
• Possibility to change provider: increase competition and decrease switching costs
• Right to oppose
• Prohibition of some types discrimination
• Decrease welfare
• Based on un-acceptable grounds
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4. Types of legal instruments and remedies
Types f legal
instrument
Consumer protection Personal data protection Competition protection Discrimination
Protection
Transparency
Explainability
Different degrees of transparency
- Mere fact of personalisation
- Models of personalisation: criteria,
weighting
- Specific personalisation offered:
criteria, weighting
- Average or median price offered
- Use of personal data
- Rationale behind the model
or criteria used for
personalisation
User choice Offering price personalisation may be
considered as unfair under some
circumstances affecting the quality of
consumer choice
- Need data subject consent
to base personalisation on
personal data
- May stimulate competition
hence users’ choices
Prohibition
of some
personalisa-
tion
- Personalisation based on
sensitive data can be
prohibited
Welfare-detrimental (case-by-
case)
Agreements
- Horizontal
- Vertical
Unilateral conducts
- Exclusionary in B2B: internal
discrimination and external
discrimination
- Exploitative in B2C
- Personalisation based on
sensitive grounds such as sex
or racial/ethnic origin
- In EU, personalisation based
on nationality or residence
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5. 2. Policy Recommendations: Rules and remedies
• More user information given the high information asymmetries
• Price personalisation and main criteria used in the models
• Disclosure taking into bias and heuristics: EAST
• Stimulate user choice
• Effective competition: exclusionary behaviours and ensure a level
playing field
• Right to oppose personalisation when based on personal data
• Prohibition of some forms of personalisation
• Unacceptable grounds in liberal democracies
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6. Effectiveness and enforcement
• Clear and legally certain rules
• Principles-based rules can adapt to fast and unpredictable evolutions
• Need to be clarified with case-law, speeded up by soft-law and soft
enforcement
• Strong and expert enforcement authorities
• Financing, staff, expertise esp. computer scientists
• Sanctions with sufficient deterrent effects
• Cooperating enforcement authorities
• At the national level: as the rules are mainly complementary (e.g. FTC)
• At the international level: as the main digital firms are global (e.g. DCH)
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7. alexandre.destreel@unamur.be
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